Paul Bassat and Justin Liberman are trend setters – a perfect example of the marriage of Melbourne’s old money and new. Bassat, along with brother Andrew, created recruitment company Seek, now a $2.4 billion market behemoth, while Liberman is the son of Boris, the patriarch of the famous – and extremely reclusive – second-richest family in the land, with an estimated fortune of $2.2 billion.

Instead of heading down the traditional investment path, Liberman joined Bassat earlier in 2012 and put tens of millions into Square Peg Ventures, a backer of early-stage technology companies.

“[Families] who have made a lot of money in property, transport or retail are obviously aware of the Facebooks and other high-profile success stories," Liberman says in a rare interview with The Australian Financial Review.

“They want an exposure to that. What we provide is hopefully a trusted partner to do some of that investing."

Liberman is far from the only one of the second generation of Melbourne private family dynasties looking to technology. Indeed, a network of old and new money has sprung up, working together, investing together and introducing the latest hot deals to each other.

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It’s “more octopus with tentacles everywhere, rather than a hub and spoke system with a central operator", according to one successful young entrepreneur.

It is not a surprise to learn Bassat and Liberman have offices 200 metres apart in Melbourne’s South Yarra, home to hip Toorak Road and Chapel Street.

The pair shuffle back and forth between their offices, with the cafes and restaurants of the area acting as “a third boardroom", according to Liberman.

There is plenty of commercial activity in the area and many young entrepreneurs full of the latest digital ideas to run in to.

There are many more of these investment conduits.

Tony Gandel, son of billionaire property developer John, is another. He heads up Gandel Invest, which has made strategic investments in technology companies in Australia and the United States, including the Seattle-headquartered Datacastle.

Paul Hains, son of another billionaire investor David, has established his own digital magazine, Aeon.

Meanwhile, Computershare founder Chris Morris, who has a fortune of $555 million, has children in the technology sector and has also made investments himself, including online marketing company Webfirm with BRW Young Rich List members Adrian Giles and Andrew Barlow.

The Libermans have made investments with David Gold, a one-time Young Rich List member and original dotcom boom darling of retailer dStore.

Old money is actively looking for new, but Justin Liberman insists people shouldn’t be surprised by his family’s involvement in technology.

His grandfather Jack and great uncle Chaim made the initial family fortune in the rag trade after World War II, but “my father Boris had always been fascinated by alternative investments," says Liberman.

“Going back 25 years . . . the family has made a range of investments in technology, hardwares . . . from the sublime to the ridiculous.

“We spent 10 years with one inventor," he says.

“He was coming up with different engines and all sorts of weird and wonderful things, none of which ever got successfully commercialised."

As well as making a seed investment in online dating website RSVP, one of the family’s technology successes was a then fledgling online job advertisement company called Seek.

Bassat and Liberman established Square Peg Ventures, along with the likes of Barry Brott, an executive of the Liberman family investment company Jagen, and former Seek executive Dan Krasnostein.

Square Peg has since made eight investments in various fledgling technology companies.

One is a mobile app developer biNu – which counts Google executive chairman Eric Schmidt as an investor – and another is a mobile donation platform called Budge.

“We think it’s a really exciting time for the technology industry," Bassat says.

“We are focusing on the early-stage end of the market. We think we can add a lot of value."

Another crucial part of the network is Merav Bloch, Square Peg Ventures’ Silicon Valley-based investor. The former lawyer is the granddaughter of the late Arnold Bloch of Melbourne law firm Arnold Bloch Leibler, and is married to Anthony Goldbloom, the founder of crowdsourcing website Kaggle and a member of Forbes’ 30 Under 30 list.

Bassat says: “We get a lot of deal flow via Merav. There are Aussie entrepreneurs [in Silicon Valley] that get in touch with Merav and Anthony."

Liberman is a regular attendee at venture capitalist Stuart Richardson’s angel investor pitch nights. Richardson organises invitation-only dinners for the Aurelius Digital network at fashionable Melbourne restaurants, during which fledgling entrepreneurs try to attract wealthy backers. Among the lawyers, accountants, bankers and entrepreneurs that attend, Richardson says it’s the family office representatives that are the fastest-growing group.

Barlow, Giles and fellow Young Rich List member Ryan Trainor also make appearances at the dinners.

Bassat has joined forces with Tony Holt, a former senior managing director at Macquarie Group, to form Victoria Capital, which aims to syndicate deals to investors in their network. With Square Peg and Victoria Capital, Bassat is hoping to replicate the success his brother Andrew has had with his stake in Gabby and Hezi Leibovich’s Catch of the Day e-commerce group.

Who needs Facebook when you’ve got Portsea?

To understand the way the Melbourne network interacts, examine the share register of a small cap listed company such as
Western Desert Resources
. Though its share price dropped after a Chinese company didn’t follow through with a takeover offer in October, the iron ore prospect’s shares have still almost doubled in 2012.

Which makes cornerstone investor and billionaire
Bruce Mathieson
well and truly in the money. So are other investors such as Jayco Caravans owner Gerry Ryan and property identity Max Beck, who bought in after Mathieson made his move into the company in May 2011.

What do they have in common? All are from Melbourne, are on the BRW Rich List and all are long-time mates – meaning it’s probably not a coincidence they are all shareholders.

It is a similar story at oil and gas play
Molopo
. Beck is on the board, while Mathieson, apartment builder Eddie Kutner and Boris Liberman are also investors. All supported Beck when he overthrew the previous board in 2010.

There are countless other examples. When they dabble in the sharemarket, they dabble together. They also invest privately together, as Beck and billionaire trucker
Lindsay Fox
– who once tried to take over Ansett with great mate, retailing billionaire
Solomon Lew
– have jointly at Essendon Airport.

The group members are in constant contact. “You pick up the phone to call one of the guys in the network and ask them what someone you meet is like and you find out pretty quickly," says one. “If you want to raise $50 million you can make a few phone calls and get in done in an afternoon," says another.

It all goes back to the secretive US-founded Young Presidents’ Organization, in the 1970s. Many of these self-made entrepreneurs weren’t interested in joining the stuffy Melbourne establishment clubs. The YPO instead provided the opportunity for like-minded individuals to get together and talk business. Beck, Fox and the late Richard Pratt were members, as was entrepreneur and Athletics Australia president
Rob Fildes
, another member of the latter-day network.

Most will spend the majority of January down at Portsea on the Mornington Peninsula, at their respective holidays homes that are either next to each other or nearby. Lew will host many of his mates on his maxi-yacht, while Beck will host the annual Colwyn Cup tennis tournament.

They’ll also holiday together. For years, Richard Pratt lent his corporate jet to his great friend Kevin Bamford, who co-owns the Melbourne Cup winning horse Americain with Ryan, and former Enders IXL executive
Peter Scanlon
.

Others that are part of the network include Queen’s counsel
Allan Myers
, who had a huge investment in a Polish brewery with John Higgins, a close friend of Scanlon.
Lloyd Williams
and Ron Walker are also part of the group, as is Rip Curl co-founder Brian Singer, who owns horses with Williams. PFD Foods owner Richard Smith also owns horses with Mathieson and pops up on many of the same share registers.